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Gov. Jerry Brown, Lawmakers Strike a Deal on Key Budget Issues

Gov. Jerry Brown and top lawmakers have reached agreement on some of the most contentious issues in the state budget, granting the governor significant victories on the redistribution of school money and expectations of revenue.

June 11, 2013

By Chris Megerian and Anthony York

Gov. Jerry Brown and top lawmakers have reached agreement on some of the most contentious issues in the state budget, granting the governor significant victories on the redistribution of school money and expectations of revenue.

The budget plan would increase funding for schools across the board and send extra money to districts with large numbers of poor students and English learners -- a key goal for Brown.

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In addition, legislative leaders agreed to use Brown's more conservative estimates for state income, bolstering the governor's ability to limit state spending.

Senate leader Darrell Steinberg (D-Sacramento) and Assembly Speaker John A. Perez (D-Los Angeles) huddled with Brown in the governor's office Monday afternoon and emerged smiling. They told reporters that only a few minor details remained to be worked out.

"It will be a budget that I think accomplishes all of the things that we have sought to accomplish," Steinberg said.

He and Perez persuaded Brown to accept some new spending for social services and health programs, though not as much or as quickly as they had wanted.

A joint legislative committee hammered out many of the final details Monday evening, and Brown issued a statement praising lawmakers' work.

"The Legislature is doing their job and doing it well," he said. "It looks like California will get another balanced budget and, very importantly, educational funding that recognizes the different needs of California's students."

The Legislature must pass a budget by Saturday, and the governor must sign it before it can take effect July 1. With those deadlines looming, lawmakers have been trying to refocus Sacramento's attention on state finances rather than a federal investigation into one of their own, Sen. Ronald Calderon (D-Montebello).

Calderon returned to the Capitol on Monday for the first time since the FBI searched his office almost a week ago, and he broke his silence on the issue.

"My intention at this point is to do my job that I was elected to do," he told reporters at a brief news conference.

On the nature of the investigation, Calderon said, "I have a lot of my own questions that aren't answered yet." He said the situation was "very stressful."

A law enforcement official with knowledge of the investigation told The Times last week that authorities are examining Calderon's "income stream." City officials in Los Angeles County and a utility contractor said federal agents have been asking questions about connections between a controversial water district, the senator and his brother, Tom Calderon, a consultant and former assemblyman.

Meanwhile, legislative staff members were racing to draft bills for the agreements reached in closed-door negotiations between the governor and top lawmakers.

Negotiations on school funding were initially a point of disagreement between Brown and lawmakers. But they reached a compromise that largely mirrors the governor's original proposal to divert money from wealthier school districts and send it to needier schools.

The agreement includes slightly more money for every school student and a slightly higher threshold than Brown proposed for school districts to qualify for the extra funds, or "concentration grants" -- 55% of a district's students must be poor or English learners, rather than 50%.

The Democrats who dominate the Legislature backed away from an early proposal to fuel the budget with higher estimated tax receipts than the governor had calculated. Brown has repeatedly insisted on using his figure, which was $3.2 billion less than the Legislature's budget analyst projected.

The governor said that relying too much on stock market improvements could be dangerous for California's finances. Using the governor's lower estimate "doesn't close the door on anything," Leno said. The Legislature could revisit the revenue and spending levels in six months, he said.

Brown agreed to spend $140 million to help people with severe mental health needs -- money not included in his own proposal. Other legislative bids were pared back and delayed somewhat on hopes that the state will be on firmer financial footing later. For example, Perez's plan to reduce university costs for some students was reduced in size to roughly $300 million from $460 million and will be phased in over four years starting in fall of 2014.

Brown and lawmakers also struck a deal on the use of money generated by Proposition 39, which changed the corporate tax code when voters approved it in November.

Roughly $2.5 billion will be available for energy-efficiency projects at schools and community colleges over the next five years. Officials can tap the money by submitting detailed proposals.

Sen. Kevin de Leon (D-Los Angeles) said in a statement that the plan includes "strict accountability so we can report back to taxpayers exactly what they received for their investment of these public dollars."

(c)2013 the Los Angeles Times

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